Thinking Twice: Part 2

In The Salmon Of Doubt, Douglas Adams wrote out a set of rules to describe how people react to new technologies. These have been enjoying some sort of rebirth recently, I keep coming across references to them. They seemed apposite for what I wanted to write about tonight:

1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.2. Anything that’s invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.3. Anything invented after you’re thirty-five is against the natural order of things.

When I read it for the first time, it made me laugh, secure in the certainty that I wasn’t one of those people who felt that way. And then I remembered one of my favourite quotations, one from slightly before my time on earth:

If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts, he shall end in certainties.

So, armed with the Francis Bacon quote above, I made sure I kept asking myself if there was anything that emerged after my thirty-fifth birthday that I considered to be “against the natural order of things”.

Loosely referred to as fracking. I’ve thought about it, I’ve thought twice about it, I continue to think about it, but I am not comfortable with the precise combination above.

First of all, I have an instinctive reaction against it. Someone drills down, drills deep down, then turns left and drills under my house. Then proceeds to blast high-pressure fluids through rocky formations in order to extract stuff that couldn’t be extracted before. Then proceeds to get rid of the fluids somewhere where no one will notice. [Reminds me of Jamie Oliver’sPink Slime nightmares]. Surely that’s going to undermine my house?

Odd. So this whole thing wasn’t making money either, and it wasn’t a slam-dunk that it would ever make any money. So how come so much money was being invested? Where was the money coming from? Which led me to articles like this one: Debt levels in Energy Sector Warn Investors of Looming Bust. An unintended consequence of quantitative easing? Perhaps. It’s happened before.

Thirdly, if it doesn’t even make economic sense, then I start thinking twice. Maybe the instinct is not that far off. Maybe the truth is just what the evidence suggests it is.

So it looks like I am a Douglas-Adams-style Luddite. I’m nervous about hydraulic fracturing in conjunction with horizontal drilling. Unseemly haste by some market participants makes my nervousness increase. And the paucity of economic value suggested by people like Einhorn makes me twitch all over.

I shall keep thinking twice about it. Not convinced. Not convinced at all.